Employers are Adopting Value Innovations to Manage Health Care Costs and Improve Health > Hospital Association of Pennsylvania


Login to view your account.

Don't have an account? Click here.


Employers are Adopting Value Innovations to Manage Health Care Costs and Improve Health

August 07, 2018

Employer-sponsored health insurance coverage accounts for nearly half (49%) of insured Americans. These employers are constantly looking for new ways to manage rising health care costs and improve employee health to ensure better productivity. The Duke Margolis Center for Health Policy recently released a brief, which explores this issue.

The Affordable Care Act and other government policies have driven the change toward a value-based health care system. This new system emphasizes health and wellness, and pays providers based upon quality outcomes. In this new environment, employers are working to focus on the value of care.

What is the current state of employer-sponsored health insurance coverage?

  • Average premiums are approaching $7,000 for an individual and almost $19,000 for families, an increase of almost 20 percent during the last five years.
  • More than half of workers have an annual deductible over $1,000 (up from 34% in 2012)
  • High health care costs often come at the expense of salary increases
  • Employer-sponsored plans have more flexibility to innovate by changing their provider networks, their benefit package, and how they pay providers

The Duke Margolis Center for Health Policy brief highlights three different approaches that employer health plans are taking to improve the value of health care. Specifically, the brief explores:

  • Population health management with employer-sponsored clinics
  • Payment reform
  • Identifying high-value providers and navigating the health care system

More than 150 million Americans are reported to have at least one chronic condition. According to the brief, this population drives 90 percent of U.S. health care costs. Care coordination and patient education are essential to improve health and save money.

The brief explains that employers have targeted this issue in a number of ways:

  • 62 percent of large employers and 38 percent of small employers offer health assessments, and more offer smoking cessation, life coaching, and weight-loss support
  • 20 percent of employers opened onsite clinics, and 8 percent have near-site or multi-employer clinics, with a larger percentage of employers looking to do the same

The key to success is creating onsite or near-site clinic-based services with a population health management program. Employers are turning to third-party firms to coordinate clinics. They  hire nurse navigators who oversee care plans for patients, organize referrals, and coordinate communications with all providers. Data sharing is critical to the process.

More employers also are using value-based payment models as an alternative to fee-for-service, including accountable care organizations (ACO), primary care-based models, and bundled payments. According to the brief, more than 20 percent of large employers are promoting ACOs, with another 26 percent considering implementing such models in the near future. A bundled payment simplifies billing by “bundling” all of the various services associated with a surgery, procedure, or chronic disease management into a single payment. That single payment provides greater cost predictability for the payer.

Finally, the brief looks at how cost-sharing strategies such as high-deductible plans aim to incentivize employees to make more thoughtful financial decisions when it comes to their health care. The authors stress that many employees struggle to effectively navigate the complex health care system. They point to a 2016 survey in which 55 percent of Americans were concerned about their ability to coordinate all aspects of their health care and benefits.

In that same survey, 80 percent said they would want a single resource to help with their needs, like selecting benefits, finding providers, coordinating care, and understanding treatment options. In response, a 2018 survey by the National Business Group on Health found 66 percent of companies will offer medical decision support services during 2018, up from 47 percent during 2017.

Value-based reforms are spreading throughout the employer-sponsored insurance sector. The brief concludes that, “With almost half of Americans insured by their employer, innovation in this environment is critical for innovation across the health care sector.”

« Close